NSW pays $5m for spurned Darling Harbour designs

THE state government will pay up to $5 million to the losing bidder in the Darling Harbour redevelopment but is resisting calls to make the bid public.

The Deputy Premier, Andrew Stoner, said the payment was required to restore confidence in ''doing business with government'', which he claimed took a ''king hit'' under the former Labor government.

The payment will be made despite state guidelines for public-private partnerships which say unsuccessful bidders for government projects should not be reimbursed, except in exceptional circumstances.

Last week Lend Lease won the rights to a $2.5 billion remake of Darling Harbour, comprising Australia's largest convention and exhibition space, a new entertainment centre, a 900-room hotel and residential precinct.

The bid beat out the VeNuSW consortium, including Brookfield Multiplex, Plenary Group and Sydney Place Management.

Private companies are not traditionally paid to bid for government projects. However, the government will pay the consortium up to $5 million towards its bid costs, in return for intellectual property rights for the proposal, including designs and the master plan.

It will also pay up to $10 million to each losing bidder in the contest to run Sydney's north-west rail link.

The Opposition Leader, John Robertson, said the payments set a ''dangerous precedent'' which would lead to tens of millions of taxpayer dollars being paid to companies for bids ''they would usually do for free''.

Mr Stoner said the government made no apologies for its ''collaborative'' approach to the private sector on major infrastructure projects. He pointed to the former Labor government's cancelled CBD metro project, which resulted in a $95 million compensation payment to bidders.

An Infrastructure NSW spokeswoman said the payment ''acknowledges the high level of detail required''. In return, the government owned rights to the plans, which ''will be used as an input into the development of the final facilities''.

The chief executive of the Urban Taskforce, Chris Johnson, asked why the government would seek rights to a design it deemed inferior and called for the losing bid to be made public in the interests of ''transparency and openness''.